In 2014, Mark Zuckerberg bought the WhatsApp app from its developer for nearly $20 billion. Seven years later, only he and his team of accountants know for sure whether this operation was profitable or not.
It is clear that the value of this application lies solely and exclusively in the huge portfolio of users that you control with it, and the valuable information that its domain offers you. Although WhatsApp is end-to-end encrypted, I don’t believe Zuckerberg isn’t getting some kind of profitability from said app, which to this day is still free and ad-free….
WhatsApp has undoubtedly become the messaging application with the most users all over the planet. Billions of people use these cats regularly every day. It far exceeds other applications such as FaceBook Messenger, WeChat or Telegram.
The current success of this application is due to several factors. The first reason is that it was the first instant messaging application to hit the market, and it quickly became very popular. Another cause, no doubt, is its ease of use and reliability. Except on rare occasions when its servers crash, it’s an application that always works, and very well. And perhaps most important of all is that it’s free and there are no ads. And that’s when the question arises: is Zucherberg losing money with WhatsApp?
A little history
It is said that whoever strikes first strikes twice. WhatsApp was launched in 2009. At that time the only way to send messages from mobile to mobile immediately was by SMS or between the owners of a Blackberry terminal (among which I include myself) who had their own application of WhatsApp messaging, but of course it only worked between cell phones of this brand.
During the first years of its existence, WhatsApp was free the first year, and the second you had to pay 89 cents for an annual subscription. For iOS users, it was already common to pay for an app, but many Android users made their first payment on Google Play because of this subscription.
This subscription was not very serious. Many times the app itself was renewed for another free year before the end of the first year. WhatsApp wanted to reach as many users as possible, even if it had to offer millions in annual subscriptions.
Finally, in 2014, seeing that the issue of annual subscription had not yet materialized, and with the fear that users would migrate to a new competitor in the world of messaging such as Telegram, WhatsApp became free. for all time.
2014 was crucial for WhatsApp
In 2014, Zuckerberg bought WhatsApp for $20 billion.
2014 was a year that marked a before and after for WhatsApp, due to two very important events that undoubtedly marked the trajectory of the application and why it is still free today.
First, because WhatsApp was acquired by Mark ZuckerBerg (at this point in the film, he doesn’t explain who that individual is) for almost $20,000 million. There was then a lot of speculation about Zuckerberg’s intentions with this purchase. We all thought that WhatsApp would be integrated with FaceBook, thus unifying all users in a single application. We were wrong, or it was just Mark’s idea, but he couldn’t bring himself to do it.
And second, that that same year, a new messaging app appeared out of nowhere: Telegram. A tough Russian competitor, like Ivan Drago in the movie Rocky Balboa. Pavel Durov and his team of developers launched a messaging application that made the pulse of Zuckerberg himself tremble, who already had his WhatsApp in his pocket, wanting to exploit it and recover these twenty billion dollars.
And the owner of FaceBook and Instagram had to seriously rethink what to do with WhatsApp. The “Ivan Drago” of messaging apps was bigger and stronger than him. It had very strong fists: your messages were much more secure because they were encrypted, it was really cross-platform, being able to be used on several devices at the same time (like a PC), and it was totally free with no ads. A very powerful threat.
And Zuckerberg panicked. He knew that any wrong move would cause millions of users to switch to the new Telegram, and if they tried it, they would never come back. Several years have passed, and the CEO of Facebook is still not moving.
Telegram is still free and ad-free, and as long as you can hang on, WhatsApp will stay the same. So Zuckerberg, seeing that he cannot “reach” the private user, decided to start doing business with WhatsApp for business.
Whatsapp Business
With WhatsApp Business, the platform is starting to generate revenue.
WhatsApp Business, is an application created in 2017 and focused on the business of companies. It was created so that small businesses can communicate with their customers, show them their products and services, and be able to chat with the customer while they buy and answer their questions.
A good way to connect the company and the customer, allowing you to create a virtual catalog to display products and services, and use special tools to automate, order and quickly respond to messages. It has free services and others that are paid.
And in addition to charging for these services, with WhatsApp Business, Zuckerberg collects a large amount of very valuable business information, which can be exploited on other platforms such as Facebook.
WhatsApp Payments
WhatsApp Payments will be Zuckerberg’s next step in leveraging WhatsApp. A payment service similar to Bizum that we all know. And again, with the fear of “touching” the end user, for him the payments and the income will be free, and it will be the companies who will pay the price.
It started operating in Brazil last year, and it is expected that in this new 2021 it will be extended to more countries. Although the service is free for users, due to the large volume of transactions this platform can generate between individuals and businesses, the profits for Zuckerberg can be considerable.
Rocky hopes to tire out Ivan Drago
Pavel Durov, the Ivan Drago of messaging.
As in Sylvester Stallone’s film, the American waits for the Russian to get tired, to finally win the fight. That’s what Mark Zuckerberg does. He knows that sooner or later Pavel Durov will have to charge for his Telegram, or introduce advertising to generate profit. This will be the moment when the American will make a gesture, and will do the same, to continue to be the world champion of messaging, in number of users, and finally, to be able to make WhatsApp profitable.
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